Question Selling As Is Vs. Foreclosure - Is There a Choice?

[Barbisi]

We had planned to sell in 2022 on the competitive market but it is now clear due to yesterday's sewer revelation we would have to fix this first along with a whole host of system issues to be able to pass inspection.Then there's the solar panel lease to deal with.
Has any one accepted one of these "Will buy as is, no need to show or fix up." and came out with any money? I know these would be low ball offers but at least we might get enough to leave (i.e. pack up and move our belongings).
We lost $20k on the first house right at the closing and only had enough (after we paid $60k on CCs ) to make a down payment and move our stuff!
Please share your experiences and thoughts.
I am feeling desperate right now!

[shipo]

Back in 2012 my wife and I were grappling with the imminent failure of both of our small businesses (mine due to my *former* business partner spending upwards of $200,000 in my name for a facility and build0ut we didn't need and never ended up using) as well as being significantly under water on our home (new when we bought it in 2002) due to numerous issues with the home, most notably radon in the basement, arsenic in the well water, and oh, the minor issue of our well, which was certified at 5 gallons per minute only producing maybe 4 gallons per hour. We ended up finally finding a buyer during the fall of 2013, unfortunately the home sold for roughly $50,000 below what we owed and since the second mortgage company refused to allow a short-sale, the only way we were able to complete the sale was to agree to sign a personal note for the difference.

Shortly after the sale we separated, and shortly after that she filed a Chapter 7, this in turn dumped all of debt burden from my failed business, our family debt, the debt from the second mortgage, and any debt I'd been foolish enough to co-sign on for her business, all in my name. Obviously my own bankruptcy, a Chapter 13 in this case, was a "when-not-if" scenario.

The difference between your situation and mine is I managed to get out from under the house before I filed Chapter 13; in many ways that was a blessing.

[Barbisi]

Well, shipo when this BK13 ends (if the trustee allows it to end LOL!), we will have no debts comparable to your sad situation - just a house with burgeoning issues and a mortgage that increases every year with out fail (now $2400 (with the solar panel lease fee included ).
This is simply not sustainable!
{P.S. we know all about radon -the house that bankrupted us cost us nearly 1k to install proper mitigation - this current house includes a system already working!}

[shipo]

Even thought it didn't seem like it at the time, the fact the second mortgage company blackmailed us into signing a personal note for $48,000 in lieu of a short-sale (they kept refusing the short saying, "We know for a fact you have more money"). For us, this turned out to be a blessing in disguise. Why? Our credit report does not show a foreclosure or mortgage shortfall of any sort, just unsecured debt which got cleared via the Chapter 13; this in turn means we can apply for an FHA mortgage as soon as the two year window passes following my discharge.

As I understand it, if you have a foreclosure, a short-sale, or any manner of a shortage on the repayment of a mortgage on your record, then the waiting time post-discharge is longer. If y'all are thinking to buy a new home then following the path to foreclosure may not be in your best interest.

[justbroke]

As I understand it, if you have a foreclosure, a short-sale, or any manner of a shortage on the repayment of a mortgage on your record, then the waiting time post-discharge is longer. If y'all are thinking to buy a new home then following the path to foreclosure may not be in your best interest.

For FHA loans this is true. For FHA a foreclosure will require 7 years of seasoning without special circumstances. And you can pretty much forget about special circumstances. It is difficult to find a lender willing to try and for the buyer to have an acceptable reason. (I went through a few trying to get an "early" buy at year 1.)

For conventional, they will go by 2 years if the bankruptcy discharged the mortgage debt (with proof). For some reason, FHA has not matched what the government-sponsored entities (GSEs) allow when a mortgage is discharged in a bankruptcy. (The GSEs are Fannie Mae and Freddie Mac)

Fannie Mae B3-5.3-07, Significant Derogatory Credit Events - Waiting Periods and Re-establishing Credit (08/07/2019)

Foreclosure and Bankruptcy on the Same Mortgage

If a mortgage debt was discharged through a bankruptcy, the bankruptcy waiting periods may be applied if the lender obtains the appropriate documentation to verify that the mortgage obligation was discharged in the bankruptcy. Otherwise, the greater of the applicable bankruptcy or foreclosure waiting periods must be applied.

[flashoflight]

Speaking of FHA, how about a FHA 203k refi rehab loan to fix most of this stuff in one shot ($25k-$30k for the rehab)? If your payment goes down, you won't benefit until the 13 is done but at least it won't go up... Actually your payment has to go down or the trustee won't approve. You will need a lender that does manual underwriting and you cannot be late on anything (more than 29 days past the real due date, not the grace period date) including the trustee payment. I only know of two mortgage brokers that do ch13 with manual underwriting. You only need 12 months into the ch13 plan to do this.